Hints That you Might Have a Subrogation Case

Anytime that the failure of a product causes personal injury or property damage, there is a possibility that an insurance carrier could recoup its expenditures from the manufacturer, installer or servicer.  However, not all product failures result in grounds for subrogation claims.  Sometimes products “wear out” and when they do, it can be due to the expiration of the useful life of the product.  Case in point: water heaters.  Depending on who you talk to, the useful life of a residential water heater can be anywhere between five and ten years.  Then there are those more expensive models that can last between 10 and 15 years.  The life of a product has to be taken into consideration, usually during the investigation phase, so as to make sure that the subrogation case will not be summarily dismissed if the case goes to court.  In the case of fires, both structural and vehicular, where the cause was electrical or mechanical malfunction; the key here is whether the equipment was recently installed or serviced by an outside service company or individual.  In the case of existing equipment, the question of maintenance will arise and become a key piece of information.  If the equipment has been allowed to go unmaintained, then it might be possible for a manufacturer or installer to argue that the operating condition of the equipment was beyond their control and they cannot be held liable.   The same thing applies to situations involving water damage.  Water damage can occur from leaking refrigerators, dishwashers, washing machines, and any other piece of equipment that uses water in the process. 

There are also situations that arise where subrogation is not so obvious.  Assuming that an employer is operating a safe workplace, on the job injuries can be caused by the operation of equipment that is not properly guarded.  OSHA regulations are in effect that prohibit the operation of rotating or moving equipment without proper guarding.  Such equipment includes, conveyors, wire drawing machines, drill presses, milling machines, and stamping machines.  In many instances, rotating equipment is operated with the use of pulleys or flywheels.  These components have to be matched to the rotational speed of the machine.  If the machine is operated at a speed greater than the rated speed of the flywheel, then it is possible for the flywheel to fail.  If the flywheel fails under normal loading and within its expected life, then subrogation is possible.  However, if someone in the plant has increased the rotational speed of operation beyond load limits, then subrogation is most likely not possible.  It should be noted that many smaller pulleys are adjustable and as a consequence, rotational speed can be increased to a dangerous level.  In addition failures from hydraulic hoses can occur where the operator is sprayed with hot oil.  If the hose is routinely replaced as a maintenance item but, fails during its service lifetime, then it can be argued that the hose was defective and likely warrants a subrogation claim against the manufacturer.  Similarly, pressure vessels can EXPLODE and cause property damage and serious injury.  Vessels containing air, water, oil, or any other fluid under PRESSURE must be certified for the service.  If the vessel failed during its expected life, was not over-pressurized, maintained by minimizing corrosion, and inspected on a regular basis; then, subrogation against the manufacturer is a possibility.  However, if the vessel was manufactured in house, by the insured, then any injured employees might have a design defect claim against the employer.               

Boiler Refresher

R.J. Hill just completed a boiler refresher webinar class presented by Clever Brooks .  The presentation was focused on maintenance, while discussing specific tasks that should be done on  daily, weekly, monthly, and yearly time intervals.  Interest in this type of presentation is not for the sake of performing maintenance as much it is on what has to be done to prevent catastrophic failures.  For example maintaining a daily log of recorded temperatures, pressures, and flows is can be indicative of the boiler’s operating condition.  On the other hand, removal of the tube bundle each year and inspecting the tubes, helps determine when tubes and seals have to be replaced.  A boiler that is not properly maintained can become a potentially huge liability for the insurance carrier as well as the owner.  Catastrophic boiler failures can result in expenditures reaching into the hundreds of thousands of dollars if not millions.    

Fires and Appliance Safety

The weather has definitely gotten colder and heating systems are being put to the test. There are different kinds of systems; electric resistance, gas-fired forced air, hot water, and steam to name a few.  Regardless of the type of system, the potential for accidental fire is part of all heating systems.   During this time of year, it not uncommon for problems to develop which, when left unattended, can result in significant damage to homes and businesses.  For example, furnaces, both gas and electric, should be cleaned at least once per year; at the beginning of the heating season.  Some people think that just because they change their air filters every once-in-awhile maintenance is complete.  NOT SO!  Depending on the efficiency of the filter in use, some dust particles will pass through the filter media and accumulate on blower blades, motors, and heat exchanger surfaces.  The burning smell often detected when the furnace is first started is the result of dust accumulation.  If the furnace is never cleaned, dust accumulation can ignite and spread outside of ductwork.  Similarly, if the controls area is never cleaned, burners can become clogged resulting in poor combustion and sometimes, delayed ignition.  Delayed ignition of gas/air mixtures can become explosive and when ignited, can release a tremendous amount of heat with deadly force.  Poor combustion can also produce carbon monoxide which when inhaled can be deadly, especially to elderly people and young children with respiratory problems.  Similarly, electric heating systems such as heat pumps should be checked for proper operation as well as components that are in good working condition.  One of the biggest problems that should be guarded against is the wiring insulation that becomes brittle with age and cracks.  Exposure of conductors can result in short circuiting leading to a fire which can then spread to the structure.  Just because a circuit is protected with a circuit breaker doesn’t mean that a fire can never develop.  Circuit breakers are current limiting devices NOT thermal limiting devices.  Heat exchange coils, motor, fans, and blowers in heat pumps should also be kept clean.  Heat pumps come in different configurations such as air to air, air to water, and air to ground.  In the last two configurations, a fluid such as water or glycol is circulated to transfer heat to or from the heat pump.  In order to do so, a pump is used to circulate the fluid and must also be serviced at certain times.  Failure to do so can result in pump motor burnouts that could result in fire.  Remember, the pump and its motor are usually two separate components unless intentionally manufactured as a single unit.  Lastly, there is not much that can be done with hot and steam boilers except to make sure that the wiring is in good condition, stack temperature is not excessive, and piping is also in good condition.  Also, remember that piping can also be a source of ignition.  Hot piping can ignite combustibles if contact is maintained long enough.  Maintenance is the key to preventing fires in heating equipment.